Turn $15 Into $1 Million

Your child may someday be richer than you.

My oldest son, who is 6, is addicted to spending. Each time my wife or I visit the grocery store he wants to come and spend some of his cash on a toy. It usually doesn't matter what the toy is; only that it's a toy, and that he has the money to buy it.

Why does this matter to you, dear reader, who clicked on this article for a tip or two for transforming $15 into a million bucks? I'm getting there. But first, you need to know what my son didn't do this weekend and why.

Not on TargetWe have a rule at the Beyers household: Kids work. Basic chores include cleaning up toys, setting the table for dinner, and taking out the trash. Other work, such as raking leaves as my son did this weekend, earns moola.

With his raking money in hand, my son pleaded to go to Target to buy a toy. I gave in, but Saturday's trip was a disaster: He couldn't decide what to buy. Twenty minutes of wide-eyed paralysis passed before I pulled my annoyed child from the store.

A bigger haulHe warmed up when I reminded him that he could look online or through a catalog to find something he really wanted. That way, I assured him, he'd be satisfied with his purchase.

His mood improved further after we counted the stash he'd accumulated from tooth fairy visits, extra work, and generous grandparents. The tally came to $30.50. Once he knew what he wanted, I said, we'd return to the store.

Turns out my son craved a John Deere tractor-hauling set. So, on Sunday, we were back at Target. Only this time my son was deliberate in his shopping. He spent $10.50 on the mini-hauler and is still smiling about the experience.

The path to a millionI am, too. Why? Witnessing firsthand our son's willy-nilly spending forced us to make some changes: We're now demanding that he save half of what he earns.

But, of course, that's good news for both him and you. If the $15 my son has saved earns 10% annually, and if he puts away $100 more a month for the next 60 years, he'll have $1 million by the time he retires.

Now I realize that a 6-year-old is unlikely to be saving $100 a month. But couldn't you? You're already wasting at least $150 a month on lattes and take-out lunches. Cutting your grocery bill and your credit card debt might save you another $200 or more. Why not invest that money?

Seriously. Even if you're 30 with only $15 to spare, you'll still have $1 million by age 66 if you invest $350 a month and earn 13% annually. That might be improbable, but it's hardly impossible -- retired Vanguard Windsor manager John Neff, for example, produced a 13.7% average annual return for his clients over 31 years.

The brother of the Windsor fund is the Vanguard Windsor II, which earned a spot in the Motley Fool Champion Funds portfolio. Here's a sampling of the stocks you'd own with a low-cost investment in Windsor II:

Company

% of Assets

General Electric(NYSE:GE)

2.86%

Altria Group(NYSE:MO)

2.76%

Citigroup(NYSE:C)

2.61%

Occidental Petroleum(NYSE:OXY)

2.60%

Wells Fargo(NYSE:WFC)

2.57%

Source: Morningstar

Follow the moneyInvesting spare change is a great way to make the most of your money. It's also the key to doubling your savings each decade, as Shannon Zimmerman and co-advisor Dayana Yochim illustrate in each issue of GreenLight. Want to learn more? Click here for 30 days of free access to the service.

Fool contributor Tim Beyers invests spare change all the time. Why not join him? Tim didn't own shares in any of the companies mentioned in this article at the time of publication. Get a peek at everything he's invested in by checking Tim's Fool profile. The Motley Fool's disclosure policy is a bargain at any price.

Author

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At Fool.com, he covers disruptive ideas in technology and entertainment, though you'll most often find him writing and talking about the business of comics. Find him online at timbeyers.me or send email to tbeyers@fool.com. For more insights, follow Tim on Google+ and Twitter.